First Industrial Realty Trust Reports Fourth Quarter and Full Year 2016 Results

Low End of 

High End of 

Guidance for 2017

Guidance for 2017

(Per share/unit)

(Per share/unit)

Net Income Available to Common Stockholders

0.49

0.59

Add:   Real Estate Depreciation/Amortization

0.97

0.97

FFO (NAREIT Definition)

$1.46

$1.56

FFO Excluding the Loss on Retirement from a Planned Prepayment of Secured Debt

$1.47

$1.57

FIRST INDUSTRIAL REALTY TRUST, INC.

Selected Financial Data

(Unaudited)

 (In thousands except per share/Unit data)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

December 31,

December 31,

2016

2015

2016

2015

Statement of Operations and Other Data:

    Total Revenues

$               97,976

$               93,209

$              378,020

$              365,823

    Property Expenses

(29,543)

(28,966)

(112,324)

(114,628)

    General and Administrative  

(6,613)

(6,336)

(26,703)

(25,362)

    Acquisition Costs 

(153)

(1,039)

(491)

(1,403)

    Impairment of Real Estate 

-

-

-

(626)

    Depreciation of Corporate FF&E 

(196)

(168)

(776)

(688)

    Depreciation and Other Amortization of Real Estate 

(28,418)

(28,707)

(116,506)

(113,126)

    Total Expenses

(64,923)

(65,216)

(256,800)

(255,833)

    Gain on Sale of Real Estate 

7,374

35,822

68,202

48,906

    Interest Expense 

(14,175)

(17,745)

(59,430)

(67,424)

    Amortization of Deferred Financing Costs 

(782)

(868)

(3,219)

(3,159)

    Mark-to-Market and Settlement Loss on Interest Rate Protection Agreements 

-

-

-

(11,546)

         Income from Continuing Operations Before Equity in (Loss) Income of  Joint Ventures and Income Tax (Provision) Benefit 

25,470

45,202

126,773

76,767

    Equity in (Loss) Income of Joint Ventures (a) 

-

(6)

-

55

    Income Tax (Provision) Benefit 

(857)

10

(1,089)

(117)

      Net Income 

24,613

45,206

125,684

76,705

    Net Income Attributable to the Noncontrolling Interest 

(817)

(1,706)

(4,452)

(2,903)

    Net Income Available to First Industrial Realty Trust, Inc.'s  Common Stockholders and Participating Securities 

$              23,796

$              43,500

$            121,232

$              73,802

 RECONCILIATION OF NET INCOME AVAILABLE TO  FIRST INDUSTRIAL REALTY TRUST, INC.'S COMMON STOCKHOLDERS AND PARTICIPATING SECURITIES TO FFO (b) AND AFFO (b) 

 Net Income Available to First Industrial Realty Trust, Inc.'s  Common Stockholders and Participating Securities 

$              23,796

$              43,500

$            121,232

$              73,802

    Depreciation and Other Amortization of Real Estate 

28,418

28,707

116,506

113,126

    Impairment of Depreciable Real Estate 

-

-

-

626

    Noncontrolling Interest 

817

1,706

4,452

2,903

    Equity in Depreciation and Other Amortization of Joint Ventures (a) 

-

-

-

17

    Gain on Sale of Depreciable Real Estate 

(7,374)

(31,012)

(68,202)

(44,022)

    Gain on Sale of Depreciable Real Estate from Joint Ventures (a) 

-

-

-

(63)

       Funds From Operations (NAREIT) ("FFO") (b) 

$              45,657

$              42,901

$            173,988

$            146,389

    Restricted Stock/Unit Amortization 

1,473

1,603

7,371

7,177

    Amortization of Debt Discounts / (Premiums) and Hedge Costs 

64

148

264

592

    Amortization of Deferred Financing Costs 

782

868

3,219

3,159

    Depreciation of Corporate FF&E 

196

168

776

688

    Mark-to-Market and Settlement Loss on Interest Rate Protection Agreements 

-

-

-

11,546

    Gain on Sale of Non-Depreciable Real Estate 

-

(4,810)

-

(4,884)

    Non-incremental Building Improvements 

(7,267)

(6,366)

(16,301)

(16,622)

    Non-incremental Leasing Costs 

(6,614)

(6,451)

(26,170)

(26,758)

    Capitalized Interest 

(1,244)

(768)

(3,523)

(2,453)

    Capitalized Overhead 

(118)

(98)

(507)

(265)

    Straight-Line Rent, Amortization of Above (Below) Market Leases 

        and Lease Inducements 

(1,473)

(765)

(6,623)

(5,795)

       Adjusted Funds From Operations ("AFFO") (b) 

$              31,456

$              26,430

$            132,494

$            112,774

FIRST INDUSTRIAL REALTY TRUST, INC.

Selected Financial Data

(Unaudited)

 (In thousands except per share/Unit data)

RECONCILIATION OF NET INCOME AVAILABLE TO  FIRST INDUSTRIAL REALTY TRUST, INC.'S COMMON STOCKHOLDERS AND PARTICIPATING SECURITIES TO  EBITDA (b) AND NOI (b) 

Three Months Ended

Twelve Months Ended

December 31,

December 31,

December 31,

December 31,

2016

2015

2016

2015

    Net Income Available to First Industrial Realty Trust, Inc.'s  Common Stockholders and Participating Securities 

$              23,796

$              43,500

$            121,232

$              73,802

    Interest Expense 

14,175

17,745

59,430

67,424

    Depreciation and Other Amortization of Real Estate 

28,418

28,707

116,506

113,126

    Impairment of Depreciable Real Estate 

-

-

-

626

    Income Tax Provision (Benefit) 

857

(10)

1,089

117

    Mark-to-Market and Settlement Loss on Interest Rate Protection Agreements 

-

-

-

11,546

    Noncontrolling Interest 

817

1,706

4,452

2,903

    Amortization of Deferred Financing Costs 

782

868

3,219

3,159

    Depreciation of Corporate FF&E 

196

168

776

688

    Equity in Depreciation and Other Amortization of Joint Ventures (a) 

-

-

-

17

    Gain on Sale of Non-Depreciable Real Estate 

-

(4,810)

-

(4,884)

    Gain on Sale of Depreciable Real Estate 

(7,374)

(31,012)

(68,202)

(44,022)

    Gain on Sale of Depreciable Real Estate from Joint Ventures (a) 

-

-

-

(63)

       EBITDA (b) 

$              61,667

$              56,862

$            238,502

$            224,439

    General and Administrative 

6,613

6,336

26,703

25,362

    Acquisition Costs 

153

1,039

491

1,403

    FFO from Joint Ventures (b) 

-

6

-

(73)

       Net Operating Income ("NOI") (b) 

$              68,433

$              64,243

$            265,696

$            251,131

    Non-Same Store NOI 

(6,700)

(4,972)

(21,484)

(17,092)

       Same Store NOI Before Same Store Adjustments (b) 

$              61,733

$              59,271

$            244,212

$            234,039

    Lease Inducement Amortization 

218

206

895

788

    Straight-line Rent 

415

854

355

(3,511)

    Above (Below) Market Lease Amortization 

(240)

(88)

(941)

(397)

    Lease Termination Fees 

(188)

(225)

(396)

(800)

       Same Store NOI (Cash Basis without Termination Fees) (b) 

$              61,938

$              60,018

$            244,125

$            230,119

Weighted Avg. Number of Shares/Units Outstanding - Basic

120,740

114,722

119,274

114,709

Weighted Avg. Number of Shares Outstanding - Basic

116,636

110,392

115,030

110,352

Weighted Avg. Number of Shares/Units Outstanding - Diluted

121,146

115,246

119,614

115,138

Weighted Avg. Number of Shares Outstanding - Diluted

117,042

110,916

115,370

110,781

Per Share/Unit Data:

   Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities 

$               23,796

$               43,500

$              121,232

$               73,802

 Less: Allocation to Participating Securities 

(82)

(153)

(411)

(248)

 Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders 

$               23,714

$               43,347

$              120,821

$               73,554

 Basic Per Share 

$                   0.20

$                   0.39

$                    1.05

$                   0.67

 Diluted Per Share 

$                   0.20

$                   0.39

$                    1.05

$                   0.66

  FFO (NAREIT)  

$               45,657

$               42,901

$              173,988

$             146,389

 Less: Allocation to Participating Securities 

(154)

(145)

(568)

(473)

 FFO (NAREIT) Allocable to Common Stockholders and Unitholders 

$               45,503

$               42,756

$              173,420

$             145,916

 Basic/Diluted Per Share/Unit 

$                   0.38

$                   0.37

$                    1.45

$                   1.27

 Common Dividends/Distributions Per Share/Unit 

$               0.1900

$               0.1275

$                0.7600

$               0.5100

Balance Sheet Data (end of period):

      Gross Real Estate Investment

$           3,384,914

$           3,293,968

      Real Estate and Other Assets Held For Sale, Net

2,354

2,510

      Total Assets (c)

2,793,263

2,709,808

      Debt (c)

1,347,092

1,434,168

      Total Liabilities (c)

1,508,638

1,594,673

      Total Equity

$           1,284,625

$           1,115,135

a) Represents our pro rata share of net income (loss), depreciation and amortization on real estate and gain (loss) on sale of depreciable real estate, if applicable.

b) Investors in, and analysts following, the real estate industry utilize funds from operations ("FFO"), net operating income ("NOI"), EBITDA and adjusted funds from operations ("AFFO"), variously defined below, as supplemental performance measures.  While we believe net income available to First Industrial Realty Trust, Inc.'s common stockholders and participating securities, as defined by GAAP, is the most appropriate measure, it considers FFO, NOI, EBITDA and AFFO, given their wide use by, and relevance to investors and analysts, appropriate supplemental performance measures.  FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets.  NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as general and administrative expenses.  EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs.  AFFO provides a tool to further evaluate the ability to fund dividends.  In addition, FFO, NOI, EBITDA and AFFO are commonly used in various ratios, pricing multiples/yields and returns and valuation calculations used to measure financial position, performance and value.

As used herein, we calculate FFO to be equal to net income available to First Industrial Realty Trust, Inc.'s common stockholders and participating securities, plus depreciation and other amortization of real estate, plus impairment of depreciable real estate, minus gain on sale of depreciable real estate.

NOI is defined as our revenues, minus property expenses such as real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses.

EBITDA is defined as NOI plus the equity in FFO of our joint ventures, which were accounted for under the equity method of accounting, minus general and administrative expenses and acquisition costs.

AFFO is defined as EBITDA minus GAAP interest expense, minus capitalized interest and overhead, plus amortization of debt discounts / (premiums) and hedge costs, minus straight-line rental income, amortization of above (below) market leases and lease inducements, minus provision for income taxes or plus benefit for income taxes, plus restricted stock amortization, minus non-incremental capital expenditures.  Non-incremental capital expenditures are building improvements and leasing costs required to maintain current revenues. 

FFO, NOI, EBITDA and AFFO do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions.  FFO, NOI, EBITDA and AFFO should not be considered as substitutes for net income available to common stockholders and participating securities (calculated in accordance with GAAP) as a measure of results of operations or cash flows (calculated in accordance with GAAP) as a measure of liquidity.  FFO, NOI, EBITDA and AFFO as currently calculated by us may not be comparable to similarly titled, but variously calculated, measures of other REITs.

In addition, we consider cash-basis same store NOI ("SS NOI") to be a useful supplemental measure of our operating performance. Same store properties include all properties owned prior to January 1, 2015 and held as an in service property through the end of the current reporting period, and developments and redevelopments that were placed in service or were substantially completed for 12 months prior to January 1, 2015 (the "Same Store Pool"). We define SS NOI as NOI, less NOI of properties not in the Same Store Pool, less the impact of straight-line rent, the amortization of lease inducements, the amortization of above/below market rent and the impact of lease termination fees. We exclude straight-line rent, amortization of lease inducements and above/below market rent in calculating SS NOI because we believe it provides a better measure of actual cash basis rental growth for a year-over-year comparison. In addition, we believe that SS NOI helps the investing public compare the operating performance of a company's real estate as compared to other companies. While SS NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance. SS NOI also does not reflect general and administrative expense, acquisition costs, interest expense, depreciation and amortization, impairment charges, equity in income and loss from joint ventures, income tax benefit and expense, sale of real estate, mark-to-market and settlement loss on interest rate protection agreements, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact our results from operations. Further, our computation of SS NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating SS NOI.

c) Effective January 1, 2016, we adopted Accounting Standards Update ("ASU") No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"), which amended the presentation of debt issuance costs on the consolidated balance sheet. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, instead of as an asset. The adoption of ASU 2015-03 was applied retrospectively. The debt issuance costs related to the Unsecured Credit Facility remain classified as an asset and are included in prepaid expenses and other assets on the consolidated balance sheets.